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Perkins Loan given new life after committee approval
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by Carolyn Smith
Wednesday, September 14, 2005
The U.S. Senate Committee on Health, Education, Labor and Pensions gave the Perkins Loan program new hope last week when it approved the loan program as part of the Higher Education Act. The program also received approval from the House Education and Workforce Committee earlier.
The future of the loan program was threatened when President George Bush cut funding for Perkins Loans from his 2006 budget.
The federal Perkins Loan program provides low-interest loans for college students. An interest rate of 5 percent is applied to the loans after a student graduates from post-secondary schooling.
"The president and his budget proposed eliminating the loan all together," Harrison Wadsworth, executive director of the Coalition of Higher Education Assistance Organizations, said. "But the HELP committee decided to keep the Perkins Loan program."
COHEAO, whose focus is to bolster access to post-secondary education, backed the reauthorization of the bill and urged the Senate and House committees to approve it.
"We are pleased that the House and Senate Education Committees endorsed the program — it was the right thing to do for students," COHEAO Board President Alisa Abadinsky said in a release.
Wadsworth added if the Perkins Loan program were discontinued, students would possibly have to take out loans with higher interest rates from private firms.
"People from low-income homes or people who have no credit history would have a much harder time affording school if this loan program would get cut," Wadsworth said.
University of Wisconsin System Communications Director Doug Bradley said federal and state financial-assistance programs are pivotal for students seeking higher education.
"We awarded over $40 million to nearly … 20,000 students in the state [in the 2003-04 academic year]," Bradley said. "So the need for these loans is there."
Bradley said the amount of money students need for college is on the rise because tuition costs are increasing.
"It's difficult for students," he said. "Historically, we had been termed 'low tuition, low aid,' but that is changing."
Federal student-aid programs, such as the Perkins Loan program, contribute more funding to students than state financial programs, Bradley said.
"We see [the Perkins Loan program] as an investment in the future," Bradley said. "The fact that it was facing elimination would have had a huge effect on the state."
Rhonda Norsetter, senior assistant to UW Chancellor John Wiley and director of federal relations for UW, said the approval by the committees is a step forward for UW students.
"We're really glad that it got reauthorization," Norsetter said. "Especially on this campus, there is a revolving account where one generation of students gets the money, pays it back and that money goes to the next generation."
The two bodies of the Legislature have yet to discuss and vote on the reauthorization of the Higher Education Act, but financial-aid experts are hopeful.
"The full Senate and House still have to act, but this is good news for students," Wadsworth said. "And I think they will vote to continue the program."
